Yes, in fact there were several coachbuilders in the US that stretched Mercedes. Officially Mercedes Benz only stretched w123 models at that time, and they were sold by the official dealers, such as the 240 D and the 250 petrol.

No idea.
It's only clear, that it's a W116, not more. The different engine-versions are only identifyable by the badge on the trunk (if there is one there and if it's a correct one). I think, the 6.9 has originally bigger tires as the only visible details.